Keratinocytes are the principal cell-type of the epidermis, the outermost layer of the skin that provides a barrier against various environmental assaults. In a continual process of self-renewal, the dividing keratinocytes leave the basal layer and progressively differentiate as they migrate to the outermost layer of dead squames. These processes in the epidermis are well regulated, in part by transcription factors that control gene expression in the keratinocytes. The AP-2 family of transcription factors are expressed at high levels in mammalian epidermis, regulate many epidermal promoters and hence, may play an important role in skin epidermal development. Our preliminary studies have uncovered a functional interaction between AP-2alpha and AP-2gamma and a novel keratinocyte-specific nuclear factor KARP. We show that KARP can recruit AP-2 proteins to regulatory DNA sequences present in epidermal-specific enhancers. We hypothesize that AP-2alpha plays a role in the epidermal differentiation as shown by altered expression of differentiation markers in AP-2alpha embryonic skin. Hence, we will establish a primary keratinocyte cell culture system from AP-2alpha null embryonic skin, which will provide a useful system that is amenable to experimental manipulation. We show that the function of AP-2 proteins can be abrogated with a targeted dominant negative, which can homo-and-heterodimerize with multiple family members, thus rendering them incapable of DNA-binding. This dominant negative will be utilized to block the activity of all AP-2 proteins expressed in keratinocytes. In the present proposal we seek to purify and identify the KARP protein, a novel keratinocyte specific factor that interacts with AP-2 (Aim 1), utilize AP-2alpha null keratinocytes as means to confirm that AP-2alpha is an important component of the AP-2alpha-KARP complex and show that AP-2alphaq alone or in association with KARP regulates the proliferation and differentiation of keratinocytes (Aim 2), and employ a dominant negative form of AP-2 to assess the biological role of AP-2 during epidermal development and differentiation in an in vivo model system (Aim 3). Our studies will provide the tools to investigate the molecular mechanisms by which AP-2 and its interacting partners such as KARP control epithelial growth and differentiation and will identify key modulators of these processes. The long-term goal of these studies is to define the transcriptional control mechanisms that govern epidermal-specific and differentiation-specific gene expression. Such knowledge will provide fundamental insights into epidermal biology and is likely to have direct bearing on developing new therapies for a wide array of diseases that afflict the human skin.